27 Apr 2021 Cases

Foundation Resolution Corp. Pension Committee vs. Aon Hewitt Investment Consulting, Inc. and Alight Solutions

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Plaintiffs (Foundation Resolution Corp. Pension Committee (FRC)) in this litigation claimed that Defendants (Aon Hewitt Investment Consulting, Inc. (AHIC) and Alight Solutions, (collectively Aon)) breached their fiduciary duties with regards to the management of a defined benefit pension plan sponsored by Plaintiffs, resulting in alleged millions of dollars of losses to the pension plan.

Compass Lexecon Affiliate, Professor Laura T. Starks, the Charles E. and Sarah M. Seay Regents Chair in Finance and Co-Executive Director of the Social Innovation Initiative at McCombs School of Business, University of Texas at Austin, was retained by Defendants to review and analyze Plaintiffs’ claims regarding AON’s management of the Plan’s investment portfolio and to offer opinions regarding whether the investment decisions made by AON Hewitt were reasonable, and also to respond to Plaintiffs’ expert. Professor Starks offered the following opinions: 

  • (i) Aon made reasonable investment choices on behalf of the Plan over the relevant period; 
  • (ii) Aon appropriately managed and monitored the Plan’s asset portfolio over the relevant period, which resulted in a reduced deficit; 
  • (iii) Aon clearly disclosed the risks associated with its investment policy and with the winding down of an underfunded defined benefit pension plan; 
  • (iv) Plaintiffs’ expert’s claims that Aon’s investment choices on behalf of the Plan were deficient were fundamentally flawed; 
  • (v) Plaintiff’s expert’s loss analysis was fundamentally flawed and could not be relied upon to estimate the damages incurred by Plaintiffs as a result of Aon’s alleged misconduct; and 
  • (vi) there was no basis to conclude that Aon breached its fiduciary duty to the Plan and thus there is no basis to conclude that Plaintiff was entitled to damages.

At trial, Professor Starks testified to these opinions as Defendants’ last witness. The Court ultimately found that Defendants’ actions were appropriate, reasonable, and prudent.

Compass Lexecon worked closely with counsel from Willkie Farr & Gallagher LLP led by Craig C. Martin, that included Matthew J. Thomas and Aaron J. Hersh. Professor Starks was assisted by a team in Compass Lexecon’s Chicago and New York offices that included Adel Turki, Compass Lexecon affiliate Andrea Neves, Joseph Goodman, Constance Kelly, Mihir Gokhale, and Pat Cuscaden.

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